Amazon's latest $25 billion bond offering experienced significantly softer investor demand compared to its previous AI-fueled debt sales. According to Bloomberg News, after demand peaked at $62 billion on Tuesday, orders were pared to approximately $41 billion once banks trimmed the final spread offered to investors. The order book settled at about 1.6 times the deal size, falling well below the four times average typically seen for US high-grade corporate deals this year. As Bloomberg News reports, this muted response signals there's a limit to the amount of money available for even the highest-rated hyperscalers' AI-related debt, with investors showing up but the hysteria from earlier AI debt waves having clearly faded.
The eight-part offering spans maturities from 3 to 40 years, with all tranches pricing tighter than initial guidance thanks to Amazon's stellar credit ratings (A1/AA/AA-). The pricing structure includes: $750 million floating rate note at 58 basis points over SOFR; $3.5 billion short-term fixed at 40 bps over Treasuries; $4.25 billion short-term fixed at 55 bps; $3 billion medium-term fixed at 70 bps; $4.5 billion medium-term fixed at 80 bps over Treasuries; $2.75 billion long-term fixed at 100 bps; $4 billion long-term fixed at 110 bps; and $2.25 billion long-term fixed at 125 bps. The bond offering is being managed by Barclays Plc., Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley as joint book-running managers. Pricing for the longest portion of the deal, a note maturing in 2066, tightened by 0.2 percentage point to about 1.25 percentage point above Treasuries.
The latest offering brings Amazon's total bond issuance over the past year to about $107 billion, making it the most among big tech companies during that period. According to Bloomberg News, credit markets have been flooded with AI-linked debt sales, with Tuesday's deal boosting this year's total to about $335 billion globally, more than twice the levels seen in 2025. This rapid increase in supply has fueled concerns of investor fatigue, with Amazon's offering prompting outstanding tech bonds to weaken in the secondary market. As Bloomberg News reports, the company had previously tapped different currencies to fund its plans, including $37 billion from US dollar bonds in March (the fourth-largest US corporate bond sale on record), €14.5 billion ($16.6 billion) in euro-denominated bonds, Swiss franc bonds in May, and Canadian dollar bonds last month. The latest deal completes Amazon's US dollar funding needs for 2026.
Amazon has projected its capital expenditures will reach $200 billion this year, up from $131 billion in 2025, with most of the spending going toward data centers, chips and other equipment, according to CNBC. CEO Andy Jassy has tried to reassure investors skeptical of its plans by arguing AI is a "once-in-a-lifetime opportunity" that requires big bets. The company has reportedly signaled to underwriters that this sale taps them out for additional debt for the remainder of 2026, indicating the company may pause further major debt issuances in the near term. This follows Amazon's approximately $64 billion in bond sales across the US and Europe earlier this year, followed by a $10 billion Canadian bond offering in June and a $15 billion U.S. bond offering in November. The company has raised roughly $64 billion across offerings earlier this year, making this latest $25 billion sale part of its continued massive AI infrastructure buildout.
